26 Mar 2015 08:55
Sberbank / Statement/Miscellaneous 26.03.2015 09:55 Dissemination of a Regulatory Announcement, transmitted byEquityStory.RS, LLC - a company of EQS Group AG.The issuer is solely responsible for the content of this announcement.--------------------------------------------------------------------------- Sberbank publishes Annual Consolidated Financial Statements in accordancewith International Financial Reporting Standards (IFRS) as at 31 December2014 and for the year then ended Sberbank (hereafter 'the Group') has released its consolidated IFRSfinancial statements (hereafter 'the Financial Statements') as at 31December 2014 and for the year ended 31 December 2014, with independentauditor's report by Ernst & Young Vneshaudit. Income Statement highlights: *Net profit for the year ended 31 December 2014 reached RUB 290.3 bn (orRUB 13.45 per ordinary share) compared to RUB 362.0 bn (or RUB 16.78 perordinary share) for 2013. The decline in net profit was mainly driven byincrease in provision charge for loan impairment. *Net interest income for 2014 increased by 18.3% to RUB 1,019.7 bn,compared to RUB 862.2 bn for 2013. *Net interest margin for 2014 declined by 30 basis points as compared to2013 to 5.6%. *Net fee and commission income for 2014 increased by 27.6% to RUB 282.3bn, compared to RUB 221.3 bn for 2013. \* The Group's operating income before provision charge for impairment ofdebt financial assets for 2014 increased by 18.8% to RUB 1,300.7 bncompared to RUB 1,094.8 bn for 2013 and was driven by growth of netinterest income and net fee and commission income. *Operating expenses for 2014 increased by 12.1% year-on-year, slower thanoperating income. As a result, Cost to Income ratio improved to 43.4%versus 46.1% for 2013. *Return on equity remains high at 14.8% versus 20.8% for 2013. *Net provision charge for loan impairment for 2014 amounted to RUB 357.0bn, translating to Cost of risk of 233 basis points. Statement of financial position highlights: *As of 31 December 2014, the Group's total assets reached RUB 25,200.8 bnshowing a 38.4% growth compared to the 2013 year end, the main driver ofthe growth being an increase in loans to customers. *For 2014, net loans and advances to customers increased by 37.3% to RUB17,756.6 bn compared to RUB 12,933.7 bn at 2013 year end. *In 2014, the proportion of non-performing loans in Group's total grossloans increased to 3.2% as of 31 December 2014 (31 December 2013: 2.9%). *Customer deposits increased by 29.0% to RUB 15,562.9 bn compared to RUB12,064.2 bn at the 2013 year end, with corporate deposits being the driverof the growth. \* The Group's Equity increased for 2014 by 7.4% to RUB 2,020.1 bn, with netprofit being the major driver partly offset with negative revaluation ofinvestment securities available-for-sale. \* The total capital adequacy ratio (Basel 1) decreased by 130 basis pointsfor 2014 to 12.1%. The core capital adequacy ratio decreased by 200 basispoints to 8.6%. Financial and Operating Review: Interest income for 2014 increased by 24.3% year-on-year to RUB 1,837.9 bn.The increase is mostly attributable to an expansion in volumes of bothcorporate and retail loans. Interest expenses (including deposit insurance expenses) for 2014 increasedby 32.7% year-on-year to RUB 818.2 bn. The largest component of interestexpenses was related to retail deposits, which are the core source of fundsfor the Group. In 4Q 2014, the cost of term retail deposits decreased to4.5% versus 5.2% in 3Q 2014 as a result of early termination of depositsdue to the change in the clients' investment strategy and outpacing growthin foreign currency retail deposits. At the same time the average cost ofterm corporate deposits in 4Q 2014 increased to 6.2% versus 5.4% in 3Q 2014following the funding costs growth. Yet the largest driver of interestexpenses growth in 2014 were borrowings from banks (primarily from theCentral Bank of Russia) due to increased volumes and higher costs. As aresult, interest expenses on borrowings from banks increased by 156.6%year-on-year and on subordinated debt by 43.0% (primarily as a result ofRUB 200 bn subordinated debt increase in the mid of 2014). Net interest income for 2014 totaled RUB 1,019.7 bn, a 18.3% increaseyear-on-year. The increase is driven by growth of interest earning assets,primarily loans. Net interest income remains the main component of theGroup's operating income accounting for 78.4% of total operating incomebefore provision charge for impairment of debt financial assets. Netinterest margin declined by 20 basis points to 5.4% in 4Q 2014 primarilyfollowing the funding cost increase. The Group's net fee and commission income for 2014 totaled RUB 282.3 bn, a27.6% increase year-on-year. Income from cash and settlements transactionswith individuals and legal entities was the key driver of the growth. Other operating income / (expense) for 2014, which includes net resultsfrom operations with securities, foreign exchange, derivatives and preciousmetals and other items, totaled RUB (1.3) bn versus RUB 11.3 bn for 2013.The decrease is mainly driven by creation of other provisions (underguarantees and other assets) and net losses from operations withsecurities, partly offset by income from other derivatives. Total operating income before provision charge for impairment of debtfinancial instruments for 2014 reached RUB 1,300.7 bn compared to RUB1,094.8 for 2013, an 18.8% increase year-on-year. The growth was drivenprimarily by the growth of net interest income and net fee and commissionincome. Net provision charge for debt financial assets impairment for 2014 totaledRUB 361.4 bn compared to RUB 134.9 bn for 2013. Net provision charge forloan impairment for 2014 totaled RUB 357.0 bn compared to RUB 133.5 bn for2013, translating into Cost of risk of 233 basis points versus 112 basispoints for 2013. The main drivers of the cost of risk were generaldeterioration of the loan quality in view of slowdown of the Russianeconomy and one-off provisions on several significant exposures; increasein provisions on Ukrainian borrowers due to significant deterioration ofthe Ukrainian economy. Also approximately 20% of net provision charge forloan impairment relates to the devaluation of the Rouble which meantcreating additional Rouble provisions against foreign currency loans eventhough their quality remained unchanged. The Group's operating expenses for 2014 increased by 12.1% year-on-year toRUB 565.1 bn. The main driver of this growth is an increase in staff costsas a result of business growth. Since operating income growth outpaced thegrowth of operating expenses, the Group's cost to income ratio for 2014improved to 43.4% versus 46.1% for 2013. The Group's net profit for 2014 reached RUB 290.3 bn versus RUB 362.0 bnfor 2013, a 19.8% decrease year-on-year. The decrease in net profit for2014 as compared to 2013 is explained mostly by the significant increase innet provision charge for loan impairment. As of 31 December 2014, the Group's total assets reached RUB 25,200.8 bn, a38.4% increase since 31 December 2013. For 2014, the Group's gross loan portfolio before provision for loanimpairment increased by 37.5%. Gross loans to corporate clients increasedby 40.7% to RUB 13,778.8 bn; loans to individuals increased by 29.3% to RUB4,847.3 bn. Gross mortgage loan portfolio grew up by 44.7% for 2014 and wasthe main driver for retail loan portfolio growth. Approximately 60% of the gross loan portfolio growth is attributable to theexpansion of the Group's lending operations, though the other 40% increaseis due to revaluation of balances nominated in the foreign currencies. The proportion of non-performing loans (NPL), defined as loans for whichpayment of principal and/or interest is overdue by more than 90 days, inthe total loan portfolio (the NPL ratio) increased for 2014 to 3.2% as at31 December 2014 compared to 2.9% at the 2013 year end. The NPL coverageratio (total provisions for loan impairment to non-performing loans)remains stable at 1.4 times level in2014. Provision for loan impairment increased for 2014 by 42.5% reaching RUB869.5 bn. As of 31 December 2014, the proportion of provision for loanimpairment to total gross loans slightly increased to 4.7% as compared with4.5% at 2013. As of 31 December 2014, the Group's total liabilities amounted to RUB23,180.7 bn, a 42.0% increase for 2014 with retail deposits totaling RUB9,328.4 bn. Retail deposits remain the core source of the Group's funding,accounting for 40.2% of the Group's total liabilities. Corporate depositsincreased to RUB 6,234.5 bn as at 31 December 2014 showing a 71.8% growthfor 2014, with approximately 55% of the increase attributable to the growthof funding volume and 45% - to revaluation of foreign currency deposits.Share of corporate deposits in total liabilities expended to 26.9%. As of 31 December 2014, the Group's amounts due to banks totaled RUB3,640.0 bn, a 72.4% increase since the beginning of 2014 with the CentralBank of Russia being the main depositor. At 31 December 2014, the Group's exposure to Ukrainian risk amounted toapproximately 0.6% of total consolidated assets; this represents a 0.2percentage point decrease as compared to 0.8% at 31 December 2013. The Group's equity amounted to RUB 2,020.1 bn as at 31 December 2014, a7.4% increase for 2014. As at 31 December 2014, the Group's total capitaladequacy ratio as per Basel 1 reached 12.1%, well above the 8% minimumrequirement, and the Tier 1 ratio was 8.6%. The decrease of the capitaladequacy ratios as of 31 December 2014 is mostly explained by an increasein risk-weighted assets partly due to inflation of assets nominated inforeign currency due to the Russian Rouble depreciation. Sberbank Group's Financial Highlights for the year ended 31 December 2014 26.03.2015 The EquityStory.RS, LLC Distribution Services include RegulatoryAnnouncements, Financial/Corporate News and Press Releases.Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: EnglishCompany: Sberbank 19 Vavilova St. 117997 Moscow RussiaPhone: +7-495-957-57-21Fax: E-mail: media@sberbank.ruInternet: www.sberbank.ruISIN: US80585Y3080, RU0009029540, RU0009029557, US80585Y4070Listed: Open Market (Entry Standard) in Frankfurt ; London, MICEX, RTSCategory Code: MSCTIDM: SBERSequence Number: 2577Time of Receipt: March 26, 2015 09:24:35 End of Announcement EquityStory.RS, LLC News-Service ---------------------------------------------------------------------------UK-Regulatory-announcement transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.